The recent proliferation of digital lending apps, commonly known as loan sharks, has raised significant concerns over abusive practices targeting vulnerable individuals in Nigeria.
Consumers have expressed grievances about questionable repayment enforcement practices, exploitative interest rates, harassment, and privacy violations.
Recognizing the importance of data privacy, President Bola Tinubu took decisive action to protect Nigerians by signing the Nigeria Data Protection Bill into law in 2023.
Data protection plays a crucial role in safeguarding critical information from corruption, compromise, or loss and ensuring data privacy to protect individuals’ rights and foster trust in the digital economy.
To uphold these principles, countries worldwide, including Nigeria, have enacted regulations to safeguard their citizens’ data.
With the introduction of the Nigeria Data Protection Bill, 2023, the Nigeria Data Protection Commission (NDPC) was established to oversee data privacy matters in the country.
This comprehensive new law replaces the previous NDPB and is designed to protect Nigerians from the predatory practices of digital lending apps, which have raised concerns among consumers.
The NDPC, in collaboration with various government agencies, including the Federal Competition and Consumers Protection Commission (FCCPC), NITDA, NCC, CBN, ICPC, and EFCC, has taken proactive action to address data breaches caused by loan sharks.
Their concerted efforts are aimed at safeguarding the privacy and data protection rights of Nigerian citizens.
To ensure accountability and responsibility among digital lending apps, all such platforms are now mandated to obtain certification of their privacy policy from the NDPC as part of the registration criteria with the FCCPC.
Non-compliance with these regulations may result in penalties or fines, exemplified by the recent N50 million fine imposed on one of the lending apps. This strict approach underscores the significance of prioritizing user privacy and data protection in the lending sector.
Actively promoting compliance with data protection regulations as a cultural norm, the NDPC is encouraging data controllers and processors to voluntarily register with the commission.
Their target is to register at least 5,000 data controllers and processors before the year’s end, underscoring the government’s commitment to data protection and privacy.
“The Nigeria Data Protection Bill, 2023, marks a significant milestone in safeguarding the privacy and data protection rights of Nigerian citizens,” said Executive Vice Chairman/ Chief Executive Officer, Babatunde Irukera, the FCCPC
“By establishing the NDPC and implementing stringent regulations on digital lending apps, the government is taking active steps to protect vulnerable individuals from exploitative loan practices.
Furthermore, the potential to attract foreign investments through enhanced data protection measures is expected to stimulate economic growth in the country’s Data Protection Sector.”
Nigeria is firmly positioning itself as a responsible and secure destination for digital transactions and investments, with a clear emphasis on preserving the data privacy of its citizens.
Mr. Okechukwu Unegbu, a former president of the Chattered Institute of Bankers of Nigeria (CIBN), raised concerns about the proliferation of unethical digital lenders, commonly known as loan sharks, in the Nigerian financial system. He emphasized that these loan sharks pose a significant threat to the economy.
Unegbu called on the Central Bank of Nigeria (CBN) to take decisive actions to eliminate such unethical practices. He highlighted one of the concerning practices of digital lenders, where they resort to harassment by contacting borrowers’ personal contacts when there is a loan default, which he deemed as highly unethical.
To address this issue, Unegbu proposed empowering Microfinance Banks (MfBs) to take on a more active role in lending to small businesses.
He believes that MfBs are better suited to provide these services in a responsible and regulated manner, thus effectively eradicating the menace of loan sharks.
Comments 1